White House Makes Economic Pitch

White House Makes Economic Pitch

Article excerpt

White House Makes Economic Pitch

By Steven Dennis Posted at 6 a.m. on Feb. 19

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The latest economic report from the White House is part victory
lap, part pitch for enacting what President Barack Obama calls his
"middle-class" agenda -- including new trade deals with Europe and
Asia and the president's budget.

At a briefing for reporters Wednesday, ahead of Thursday's
release of the Economic Report of the President, chief economic
adviser Jason Furman ticked off the statistics that have buoyed
White House spirits of late -- improving economic growth, the best
job performance since 1999 last year and lower gas prices.

But there are several troubling caveats, Furman acknowledged.

The percentage of men in prime working age who have dropped out
of the labor force has grown substantially in recent decades and is
higher than many competitors. More troubling, the income of middle-
class families has been largely flat, although there are recent
signs of modest improvement. Median family incomes remain stuck at
mid-1990s levels.

"This is the big picture challenge that we're trying to overcome
as an economy," Furman said.

Furman said much of the lag in wage growth, which he attributed
to decades-long trends, came from slower productivity growth, and
somewhat less important was growing income inequality.

Furman said a bright spot is in export industries, which have
seen higher wage growth, and made the pitch for new trade deals that
would lower trade barriers.

Adviser Maurice Obstfeld said growing trade, particularly in
services, has the potential to bolster middle-class incomes. And he
noted the trade deals under development would phase-in in an effort
to cushion the adjustments to U.S. industries and workers.

The average U.S. tariff was 1.4 percent on imports, while most of
the governments the United States is negotiating with have far
higher barriers, he said.

There's also the China card. Per the White House pitch, China
doesn't insist on the same standards as the United States in its
deals, and if the United States doesn't engage these countries,
China will be setting the agenda. …